Yogurt Case Study
Smaller packaging sizes allow tracking the intake easily.5
Smaller packaging sizes also allow for the classification as a “snack” rather than a “meal” and therefore respond to different consumer needs.6 A reduced packet size of 4-oz., which can be eaten out of tube without a spoon, could be regarded as a component of a small lunch break and thus, a favorable perversion through the adult customer.7
New channel: Currently NV distributes only through the NS channel which is generating 3% of all yogurt sold.8 The rest is sold via the S channel, which is in terms of market size the more attractive channel. S are considering to introduce natural yogurts into their product portfolio in order to target higher income and less price-sensitive customers and benefit from the high unit volume growth of 20%.9 Accordingly, NV for its part is considering an introduction of their products into the supermarket channel.
2) How do the three options compare financially in terms of yearly revenue, gross margin,
required investment, and profit …show more content…
The high predicted growth rates might be not fully captured due to long-term capacity constraints, which are not considered in the calculation.
Cannibalization: Choudhury and Karahanna are suggesting a four purchase stages model, which includes the process of vendor selection. An important element of this process is to identify costs
(e.g. price or transportation costs) and benefits (e.g. convenient shopping).10 As the price is significantly lower in the supermarket channel, a cannibalization effect will occur. This should be taken into consideration when selecting the desired Option.
3) If the venture capitalists extended their deadline for meeting the $20 million revenue target by 12 to 18 months, would that change your recommended action plan?
As we can see in our cannibalization calculation Option 1 is superior to Option 2 in the first year until a 60% degree of cannibalization and Option 1 will reach the desired outcome until